As I said before, I never long or short XIN, and will never do so in the future. I am only a observer. Anyway, I speculate XIN will have good short-term performance. The public announcement today is made when the China main land index went up 6% in two days and will close for more than a week. What a well planed timing!
However, the NYC project news is no longer news. I remembered poster Double J already posted the news a few days ago. Overall, I have to stay sideline for XIN even though I feel more than likely XIN will go up substantially in the short-term. The risks are still unbearable.
What risks? What risks do they have that are more unbearable than other comparable businesses?
Investing in groupon or pandora or whatever hot internet darling is being dangled like a carrot is riskier than a brick and mortar real estate developer whose flush with ridiculous cash, has been reducing debt, pays a 6% yield, has been buying back shares, has been increasing sales in china (high growth market) as well as establishing themselves in America (NY & Nevada), has strong operation margins, and is selling at rock bottom bargain bin prices because people have been scared away from "other" fraudulent chinese companies.
Sit on the sidelines all you want. I sat on the sidelines watching AAPL go from 15 bucks to 600 and told myself if I ever find another special stock, I won't watch others get rich while I passed on opportunity. I don't think XIN is going to go to $600 like AAPL, but it is a special opportunity. 5 years from now, I expect this stock to be in the $20-30 dollar range.
growth.value, you have a choice - you can sit on the bench and watch inflation eat away at your savings or you can invest in a company that matches your very name. XIN at its current price provides value, growth, AND income. What more could you ask for?
Catnippss, thank you for convincing me to buy XIN. However, I just do not buy stocks in real estate developing industry. As a former industry consultant, I dislike RE industry as an investment. I have to say XIN's value is attempting. However, my way of investing approach is just like my ID, putting growth in front of value.
Here is the risks I worried about XIN. First, American real estate developing is a highly competitive industry. Many many firms have much more financial resources than XIN to develop projects. The potential new comers can significantly shrink the margin in the business. Also, as a foreign RE firm, XIN has a long way to learn the American market well.
Second, the backyard of XIN is still full of uncertainty. I hate to deal with uncertainties involving a lot of government. So, American health care industry is out.
Third, the value is absolutely attempting, but the accounting fraud risk is still there even with a $54 million purchase. I never doubted XIN should at least have $100 cash on hand. Spending $54 million on a project is not something new to XIN.
Fourth, don't worry. I will not let my money die with inflation. I have many other stock investments too, in the industry I like. XIN has value, but its risk adjusted appreciation potential is not higher than my other investments in my metrics.